If family supermarkets instead used an activity-based

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Reference no: EM13575555

Family Supermarkets has decided to increase the size of its Lansing store. It wants information about the profitability of its individual product lines: meats, fresh produce, and packaged food. The following data is for the year 2012 for each product line:

	Meats	Fresh Produce	Packaged Foods
Revenue	$795,000	$820,000	$475,000
Cost of goods sold	$595,000	$580,000	$355,000
purchase orders	270	323	160
hours of stocking shelves	197	2,107	1,017
items sold	304,000	444,000	103,000

The Company also provides the following information for 2012 for its three support activities:

Support Activity	Budgeted Cost	Cost Driver
Ordering	$122,000	purchase orders
Shelf stocking	$79,000	hours of stocking shelves
Customer support	$181,000	items sold

Part A
Family Supermarkets currently uses a single-driver system to allocate period costs to its product lines. The single driver that is used is the Cost of Goods Sold for each product line. Using this system, compute the allocation to Fresh Produce.

Part B
If Family Supermarkets instead used an activity-based costing system to allocate period costs, with the cost pools and cost drivers listed in the tables above, how much would be allocated to Packaged Foods?

Reference no: EM13575555

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